Mr. Ellis Jacob reports

CINEPLEX INC. REPORTS FIRST QUARTER 2023 RESULTS

Cineplex Inc. has released its financial results for the three months ended March 31, 2023.

First-quarter summary:

• Total revenue increased 49 per cent to $341.0-million compared with the first quarter of 2022.
• Net loss improved to $30.2-million, compared with a net loss of $42.2-million in the first quarter of 2022.
• Adjusted EBITDAaL (earnings before interest, taxes, depreciation, amortization and special losses) increased to $20.2-million, compared with a loss of $5.7-million in the first quarter of 2022.
• First-quarter record adjusted EBITDAaL of $8.9-million for Player One Amusement Group (P1AG).
• All-time quarterly record adjusted store-level EBITDAaL of $12.1-million for location-based entertainment (LBE).
• First-quarter record box office revenue per patron of $12.63, 5.3 per cent higher than the prior year.
• First-quarter record concession revenue per patron of $8.85, 0.3 per cent higher than the prior year.

"We were extremely pleased with the record results in our amusement and leisure businesses, which helped mitigate the short-term film content supply challenges during the first quarter of 2023, resulting in total revenues of $341-million and adjusted EBITDAaL of $20.2-million," said Ellis Jacob, president and chief executive officer, Cineplex. "We are excited to report our highest-ever combined April box office and theatre food service revenues in April, 2023.

"Coming out of this year's CinemaCon convention, the commitment of traditional and non-traditional studios to theatrical has never been stronger. We are extremely pleased with the quantity and quality of upcoming film product for the remainder of 2023 and into 2024. We look forward to many more highly anticipated films set to hit the big screen over the next few months, including Fast X, The Little Mermaid, Spider-Man: Across the Spider-Verse, The Flash, Indiana Jones 5 and the Dial of Destiny, Mission: Impossible -– Dead Reckoning Part One, Oppenheimer, Barbie and many more.

"With strong film product, commitment from our studio partners and the record results from our diversified businesses, we have much to be excited about in the future."

An attached table compares 2023 monthly box office revenues with 2019 monthly box office revenues.

Key developments in 2023

Discussed herein are certain key business initiatives undertaken and results achieved during 2023 in each of Cineplex's core business areas.

Film entertainment and content

Theatre exhibition:

• Reported first-quarter box office revenues of $123.3-million, an increase of $43.4-million (54.3 per cent) from $80.0-million due to a 46.6-per-cent increase in theatre attendance as a result of Cineplex's theatre circuit being open during the entire period, compared with the prior year when select provinces were subject to operating restrictions;
• Reported a first-quarter record BPP of $12.63, 63 cents, or 5.3 per cent, higher than the $12 reported during the prior year due to a higher percentage of premium ticket sales in the current period as compared with the prior year.

Theatre food service:

• Reported first-quarter theatre food service revenues of $86.4-million, an increase of $27.7-million (47.1 per cent) compared with the prior year, primarily due to a 46.6-per-cent increase in theatre attendance;
• Reported first-quarter record CPP of $8.85, an increase of three cents, or 0.3 per cent, compared with the prior year, due to product mix and modest price increases.

Alternative programming and distribution:

• The company entered into a theatrical distribution partnership with Lionsgate on Jan. 5, 2023, for its 2023 film slate, bringing 11 titles to Canadian audiences.
• As part of the theatrical distribution partnership with Lionsgate, Cineplex's distribution business (Cineplex Pictures) distributed Plane on Jan. 13, 2023, Jesus Revolution on Feb. 24, 2023, and John Wick: Chapter 4, on March 24, 2023. Additionally, Cineplex Pictures released a number of feature films during the quarter, including Creed III and There's Always Hope.
• Featured numerous strong performing international films, including Pathaan (Hindi), which became Cineplex's No. 1 Indian and international movie of all time. Cineplex also featured other strong-performing international films, including Kali Jotta (Punjabi), Tu Jhoothi Main Makkaar (Hindi) and The Wandering Earth 2 (Mandarin), of which Cineplex represented 83 per cent, 40 per cent and 32 per cent, respectively, of the total North American box office market share.
• During the first quarter of 2023, Event Cinema featured two major concert events from K-pop sensations BTS (BTS: Yet to Come) and Andre Rieu (Andre Rieu in Dublin), and two live presentations of the Metropolitan Opera, including Fedora (Giordano) and Lohengrin (Wagner).

Digital commerce:

• Total registered users for Cineplex Store increased 4 per cent compared with the prior year, reaching approximately 2.3 million registered users.
• Cineplex launched the Cineplex Store app on Android TV- and Google TV-enabled devices.
• The company expanded content offering, including HBO TV series House of the Dragon and The Last of Us, and AMC TV series Better Call Saul and Lucky Hank.
• The company celebrated Black History Month with a collection of films available on Cineplex Store, where $1 from every purchase was donated to The Black Academy, an organization that celebrates, empowers and showcases Black Canadian talent.

Media:

• Reported first-quarter media revenues of $22.3-million, an increase of $6.8-million, or 43.4 per cent, as compared with the prior year.

Cinema media:

• Reported first-quarter cinema media revenues of $14.3-million, an increase of $6.0-million, or 73.3 per cent, over the prior year, resulting in the return of advertisers to cinema in a variety of sectors, including financial services and broadcast media.

Digital place-based media:

• Reported first-quarter revenues of $8.0-million, an increase of $700,000, or 9.7 per cent.

Amusement solutions and LBE:

• Reported all-time quarterly record revenues of $75.8-million, an increase of $25.3-million, or 50.3 per cent, compared with the prior year.

Player One Amusement Group:

• Reported all-time quarterly record revenues of $49.6-million, an increase of $14.8-million, or 42.4 per cent, compared with the prior year. Adjusted EBITDAaL during the first quarter was a first-quarter record of $8.9-million, an increase of $3.9-million, or 77.9 per cent, compared with the prior year. The increases in revenues and adjusted EBITDAaL were primarily due to increases in P1AG amusement revenues from the United States and Canada route locations at FECs and theatres, along with an increase in distribution sales.

Location-based entertainment:

• Reported all-time quarterly record revenues of $35.1-million, an increase of $15.0-million, or 75.0 per cent, compared with the prior year;
• Reported all-time quarterly record adjusted store-level EBITDAaL of $12.1-million, an increase of $5.1-million, or 71.3 per cent, compared with the prior year. The increases in revenues and adjusted EBITDAaL were primarily due to all LBE venues being open during the entire period, compared with the prior year when select provinces were subject to operating restrictions.

Loyalty:

• Membership in the Scene+ loyalty program increased to over 12-million members as at March 31, 2023.
• Empire brands launched Scene+ in Quebec on March 23, 2023, providing members with opportunities to earn and redeem Scene+ points through Empire's family of brands across the country.

Corporate:

• On March 28, 2023, Cineplex entered into the seventh credit agreement amendment, which revised certain of the financial covenants throughout the remainder of 2023.
• The company celebrated National Popcorn Day on Jan. 19, 2023, by treating Scene+ members across the country with a free bag of popcorn. Additionally, theatre teams across Canada gifted first responders with popcorn as a show of appreciation.

You are cordially invited to participate in a conference call with the management of Cineplex to review its first quarter. Ellis Jacob, president and chief executive officer, and Gord Nelson, chief financial officer, will host the call.

Cineplex Q1 2023 earnings call

Date:  Friday, May 12, 2023

Time:  10 a.m. ET

An archive of the webcast will be available at the company's website after the webcast for a limited time.

Analysts who cover the company should use the dial-in option to participate in the live question period.

Local:  1-226-828-7575

Canada toll-free:  1-833-950-0062

Access code:  918414

All attendees should join the event five to 10 minutes prior to the scheduled start time. Media are welcome to join the call in listen-only mode.

About Cineplex Inc.

Cineplex is a top-tier Canadian brand that operates in the film entertainment and content, amusement and leisure, and media sectors. Cineplex offers a unique escape from the everyday to millions of guests through its circuit of over 170 movie theatres and location-based entertainment venues. In addition to being Canada's largest and most-innovative film exhibitor, the company operates Canada's favourite destination for eats and entertainment (The Rec Room), complexes specially designed for teens and families (Playdium), and a newly launched entertainment concept that brings movies, amusement gaming, dining and live performances together under one roof (Cineplex Junxion). It also operates successful businesses in digital commerce, alternative programming (Cineplex Events), motion picture distribution (Cineplex Pictures), cinema media (Cineplex Media), digital place-based media (Cineplex Digital Media) and amusement solutions (Player One Amusement Group). Providing even more value for its guests, Cineplex is a partner in Scene+, Canada's largest entertainment and lifestyle loyalty program.

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